India’s vibrant economy is creating a thriving business environment for foreign firms. We continue our look at some of the build and interiors biggest success stories from the past few years to inspire companies looking to expand into India to make that important first step. 

 

 

 

Despite offering Indian consumers a variety of homeware products, the key market for Häfele India, the Indian subsidiary of the German group, is in modular kitchens. The brand has had a presence in India since 2003 but is now committed to expanding operations across the country – and kitchens are a huge part of this drive.

 

India’s modular kitchen market is still in its relatively nascent stage, but still has a market valuation of $343 million with an average growth rate of 30% annually. As such, Häfele India has reacted by making a big push to raise its market share. 50% of the company’s business in India already stems from the kitchens market. 

 

So how is Häfele planning to expand its already considerable operations? Firstly, by opening more stores. The brand is aiming to build upon its base of 82 stores to above 100 by the end of 2016. "We are looking to tap markets mostly in the Tier II and Tier III cities because the spending power is higher in these areas as the cost of living is lower. Moreover, the population here reacts very positively to us as they have fewer options," explained Jurgen Wolf, Managing Director of Häfele India, to the Telegraph of India.

 

Purchasing power is expected to grow across India as the burgeoning economy creates more wealth within the population. 

Collaboration with domestic companies is a vital part of creating a successful overseas business. In order to further grow its revenues from modular kitchens, Häfele India is aiming to create franchising opportunities across India. 

 

“We are looking forward to great collaboration in the contemporary franchise format and are also open to partnering with existing as well as newer small, medium kitchen retailers in focused markets, displaying two or more kitchens with Häfele’s components,” Wolf told The Hindu newspaper’s Business Line. “We would be the endorsing brand for such small kitchen partners with necessary investment in product displays, marketing and operational know-how.”

 

 

Despite being a rapidly developing nation, both the quality and quantity of bathroom facilities and sanitary ware in India leaves a lot to be desired. But numerous government drives and initiatives are changing this, and demand for better quality toilet systems is increasing. 

Companies looking to break into this burgeoning market could do worse than to follow the example of Japanese company Toto.

 

Toto has had a strong market presence in India for over a decade. Exclusive showrooms are dotted around the country in cities such as Hyderabad and New Delhi – not only providing brand awareness but spaces for customers to get hands on with Toto products. Toto’s toilets have also been used in large scale developments such as the Four Seasons and Oberoi hotels in Mumbai. 

 

But one area where Toto noticed a golden market opportunity was in manufacturing. In 2014, the company set up an 180,000 square metre plant in Gujarat which produces around half a million toilet bowls each year. Half of the total is sold directly in India, drastically lowering shipping costs, with the rest going to Europe and the Middle East. 

 

Toto has focussed on India due to its status as an emerging market for bathroom and sanitary ware. However, brand awareness is vital as Toto is offering toilets at low prices and currently operating without a strong profit margin. Confidence in the market is still high. Toto’s President, Madoka Kitamura, told beyondbrics: “In India the main market is middle-class customers, so those kinds of products are key…not the premium products. When the market will grow…then slowly Toto will get the profit.”

 

A strong network of stores and partners, plus a dedicated manufacturing hub, means Toto has essentially set the tone for sanitary ware success in India. Following this template could result in huge dividends for smaller players. 

 

It may seem odd to highlight the successes of a truly major global player in this report, but the LED (Light Emitting Diode) lighting sector is currently relatively small in India at the moment. Philips, the Dutch electronics and lighting corporation, is one company that is going from strength to strength thanks to the way it is handling its Indian operations. 

 

 

 

Like many international firms, Philips too has its own Indian division. Its lighting business, Philips Lighting India Ltd., came from a demerging and diversifying of Philips’ interests in the country in a move that could see the brand’s 30% market share rapidly increase.

Philips' actions should be intriguing to observers. The Dutch company has identified a rapidly growing market and reacted accordingly. India’s LED lighting sector is expected to be worth $183 million by 2020. In 2013-14, 55% of Philips’ sales in the country stemmed from lighting. 

 

The importance of brand awareness should never be underestimated in the Indian market. Philips, for example, is providing over 76,000 LED lamps to provide lighting for 800 rural villages. 120 “light lounges”, essentially showrooms, have been set up across the country too. A further 80 were planned for opening by the tail end of 2015 ensuring a major market presence for the brand.

 

 

Of course, the above companies are major multinationals but their Indian implementation strategies can act as blueprints for smaller companies to follow. India is one of the world’s foremost developing nations. As such, the consumer class will quickly expand and the demand for internationally-sourced, top quality products will grow too. Many are the opportunities for foreign firms to enjoy success in India as the above stories demonstrate.